Sunday, May 1, 2016

The United States presidential elections of 2016 have been the most polarized and strange in recent decades, and could end up with the nomination (and possible election) of a Republican candidate who is racist, xenophobic, misogynist and intolerant of religious and ethnic minorities.

Some political analysts believe that this electoral cycle represents a change of alignment of the two main parties, which will have a lasting impact on American politics.

Right-wing populism

The Republican Party, which had traditionally reflected conservative "free market" positions, such as fiscal discipline, free trade, restricting social benefits programs, promotion of immigration, and international interventionism, now reflects positions of populist nationalism, including protectionism, isolationism, growing xenophobia, and criticism of free trade agreements. This would reflect the rise of both the "Tea Party", the name given to populist right-wing groups which have had an unstoppable ascent in the Republican primaries; and what it is now called the "Trumpism", in honor of the front-runner, Donald Trump.

In sociological terms, this reflects the ascendance within the GOP of the white working class, especially in the South, which before the civil rights laws of the 1960s were reliable Democratic voters; they later they became the so-called "Reagan Democrats"; and now constitute the main electoral base of the Republican Party, along with the more rural states of the Rocky Mountains.

Most of the moderate Republicans of the Northeast and West Coast have become independents, and now usually vote for the Democratic Party, especially in Presidential elections.

Populist left

Meanwhile, the emergence of "democratic socialist" Bernie Sanders as a leftist candidate for the Democratic nomination, has also pushed the Democratic Party to the left on issues such as labor rights, minimum wage, rights of ethnic minorities, and LGBT rights. Gone is the "third way" and centrism imposed by the "Democratic Leadership Council" which was reflected in the presidency of Bill Clinton and the candidacies of Al Gore and John Kerry; it has re-established the center-left in the US, called "liberalism" (although is not related to classical liberalism). Some political analysts oppose Hillary Clintonism to Bill Clintonism, on topics as varied as the reform of criminal justice, the legalization of marijuana, gay rights, and the rights of women.

Undoubtedly, the rise of the populist right and left reflects a similar trend in Europe and Latin America, and has as its basis the extended economic recession and weak recovery. The recession has led to increased unemployment and underemployment; the labor market withdrawal of many frustrated workers; many students now graduate from college without good job prospects (and, in the case of the United States with high debts); a reduction of the median income; and a significant increase in inequality, leading to excesses that have been denounced by Sanders in the US, Pablo Iglesias in Spain and Tsipras in Greece.

Trumpism resembles the racist and xenophobic nationalism of parties in countries such as France (National Front), United Kingdom (UKIP), and parties that participate in government in Switzerland (SPP), Poland (Law & Justice), Denmark (DPP), Belgium (NFA), Finland (Finns Party), Macedonia (VRMO), among others. In 10 European countries nationalist far-right parties have gained more than 15% of the vote in the most recent elections (https://goo.gl/B3n69N).

Sanderism, meanwhile, is similar to the "democratic socialist" parties of the Mediterranean, including SYRIZA in Greece, PODEMOS in Spain, the Progressive Party in Cyprus, Latvia (LSP), Moldova (PC) and Portugal (Left Bloc ), which have obtained over 10% of the vote, and are part of government in Greece and Portugal.

In Latin America, extractive populism had dominated the countries of ALBA, but in more recent times it has lost elections in Argentina, Venezuela (parliamentary elections), Ecuador (sub-national governments), Bolivia (referendum for the re-election of Morales), Paraguay and Honduras.

Between Europe and Latin America, 11 "democratic socialist" parties have obtained more than 15% of the vote in the most recent elections (https://goo.gl/qfZ25P).

"Democratic socialism" is distinguished from social democracy, as social democracy promotes greater market regulation, an enhanced welfare state, and political democracy, all within the capitalist system; while "democratic socialism" includes proposals to change the economic system to socialism, social ownership of the means of production, an increasing role of the state in productive activities, and centralized planning. Many former Communist and Marxist parties in Central and Eastern Europe now call themselves democratic socialists.

While in most countries social democracy and democratic socialism are in competition (e.g. in Spain, France, Greece, etc.); in the case of the UK, and now in the United States, representatives of democratic socialism have made progress within the established parties of the center-left. In the UK, Jeremy Corbyn, a hard left-wing MP, has taken the leadership of the Labour Party; and he has expressed support for Hugo Chavez, Hamas, and Hezbollah, among other rather extreme positions.

Sanderismo

In the US, Bernie Sanders has gone much further than anticipated. At the beginning of his candidacy, few people thought that he had any real possibilities, as a candidate who was 74 years old, socialist, Jewish, non-religious, independent (never registered as a Democrat), and that in the past had belonged to extreme left and Trotskyist parties, such as the Socialist Workers Party, the Socialist Party and Liberty Union party.

Some of these features had been rejected generically by majorities of voters: in a Gallup poll in June 2015 (http://goo.gl/I8jPZG), 50% said they would never vote for a socialist; 40% would not vote for an atheist; and 38% would not vote for a Muslim. Being Jewish, however, was rejected by only 7% of those polled, a similar percentage to being black (7%), Latino (8%) or female (8%).

However, Sanders reached high ratings in the "caucus" (committee meetings) of several states, especially those of the northern part of the US, with a large majority of non-Hispanic whites (https://goo.gl/vXpc2A). He won more than 60% of the vote in the caucuses in Alaska, Utah, Idaho, Washington, Hawaii, Kansas, Maine and Minnesota. It should be noted that these meetings are not overly democratic: in the state of Alaska, for example, Sanders won only 440 votes, which represented 81.6% of the total Democratic caucus-goers and 13 elected delegates. In Wyoming, he won with 156 votes, and in Maine with 2,231. Sanders has only received more than 60% of the vote in two primaries (internal elections): in his home state of Vermont (86%) and in the neighboring state of New Hampshire (61%).

Most of these states with high non-Hispanic white population are states in which traditionally the Republican Party wins (dubbed "red" states according to the US media, which reversed the traditional identification of conservatives with blue and progressive and leftists with red). The exceptions are Washington State and Vermont, which tend to vote for Democrats; and Hawaii, which tends to vote Democratic and where there is a large population of Asian-Pacific origin.

In the April 14th debate, which took place in Brooklyn, New York, Sanders "complained" that Hillary Clinton had won in the "conservative states of the deep South." Paul Krugman and other commentators noted that the reason why Hillary had won in those States was that they had a high proportion of African-American population, which constitutes one of the most important blocks of the electoral base of the Democratic Party nationwide. In other southern states where Hillary won, such as Florida, Texas, North Carolina and Virginia, in addition to blacks, there is a significant proportion of Latino and Asian-American population; and, with the exception of Texas, they are considered "pendulum" or "purple" states, in the sense that they fluctuate in their support between the two major parties, and winning them is essential to achieving a majority in the electoral college in the Presidential elections.

(Hillary) Clintonism

Hillary Clinton won more than 60% of the votes in the primaries of the six "Deep South" states : Mississippi, Alabama, South Carolina, Georgia, Louisiana and Arkansas. In addition, she achieved this margin in other southern states (Tennessee, Texas, Florida, Virginia), in the American Samoa (Pacific Islands) caucus, and approached this margin in another key purple state, Ohio. Her popular vote in some states was also impressive: only in the State of Florida, her margin of victory was 532,575 votes, while in Texas her lead approached 460 thousand votes. Her margin of victory in New York State was also nearly 300 thousand votes.

These large margins in several large states have allowed Clinton to accumulate an advantage of 3.2 million votes by May 1st, as well as a difference in elected delegates of nearly 300 delegates. Added to this, she has an advantage of 481 "super-delegates" who are Congressmen, Governors and other leaders of the Democratic Party. Summing together elected delegates and super delegates, Hillary had reached 2,183 delegates by May 1st, i.e. 91.6 % of the total required to reach the nomination.

As delegates at the Democratic primaries are distributed proportionally, and Clinton is ahead in the polls in key states that have not yet voted, she is virtually certain to reach the nomination. While Sanders has not yet suspended his campaign, he has reduced his staff. He has insisted he will continue to campaign until the Democratic Convention in Philadelphia, which will take place from 25 to 28 July - probably to try to influence the platform.

Platforms

Sanders platform, while seeking similar goals to Hillary Clinton (and the traditional positions of the Democratic Party), went a little further, towards a social-democratic welfare state in the European and Nordic tradition:

• Sanders proposed that public higher education be free for students (as it is already in some countries, such as Germany and Denmark). Currently, in the United States, the average annual pension cost at state universities for state residents is $ 9,139. This already includes a subsidy from state governments. Sanders's proposal was that a tax on financial transactions be imposed, although most analysts agreed that it would not have been sufficient to cover the cost; and his proposal also required that state Governors agree with the proposal and devote their own resources for this purpose (this is considered difficult, given that a majority of governors are Republicans). Hillary, meanwhile, proposed to increase subsidies for low-income students and the possibility that college graduates can refinance their debts at lower interest rates.

• Sanders proposed expanding a state-run "single payer" health system, similar to the system that currently exists for senior citizens (Medicare). In this case, Sanders acknowledged that it would imply significantly higher taxes on the middle class, but he argued that the amount of taxes would be lower by 50% compared to the premiums paid for private health insurance. Analysts indicated that there was no reason to think that it could achieve such a significant reduction in costs, since essentially the only private insurance costs that would be reduced would be the costs of marketing, advertising and accounting, which might reach 10 to 15 % of the total cost. Clinton proposes to increase the coverage of "Obamacare" to the additional 10% of the population that has not yet been covered by health insurance (the Obama health care reform has already managed to reduce the population not covered from 20 % to 10 %); and look for ways to reduce the cost of medical services and prescription medicines.

• Sanders proposed splitting up large banks that are considered "too big to fail", as they present systemic risks. Asked in an interview with "New York Daily News" exactly how he would do this, he stumbled to give the answer and could not really explain how the process would take place (essentially, he said, the banks would break themselves up). Hillary, however, felt that the focus should be on the systemic risk and not only on the size of bank assets, and they should implement additional reforms to strengthen the financial system (including non-bank financial institutions, which would not be covered by Sanders' proposal).

• The two Democratic candidates support a paid family leave of 12 weeks (e.g. for maternity or to take care of a sick family member; currently there is no such mandatory leave in the US).

• Both Democratic candidates acknowledge that climate change is an urgent crisis facing the US and the world, and will seek to promote renewable energy, energy efficiency, public transportation, and other mitigation and adaptation measures. Hillary would put in place severe regulations on "fracking" or extraction of shale gas and oil, whereas Sanders said he would ban it outright. It should be noted that natural gas has much lower greenhouse gas emissions than coal, and that currently many coal-fired power plants are being replaced by natural gas plants.

• The effect of the Sanders' proposals on the US federal budget has been estimated at a 40-50 % increase in spending, which could be addressed by a significant increase in taxes, especially for higher-income sectors.

The "reality show"
On the Republican side, the candidates have not submitted detailed electoral programs. Both Donald Trump (the multi-millionaire builder) as the Cuban-American Senator Rafael "Ted" Cruz have offered lower taxes, especially for the rich. Their proposals have been analyzed by economists, who have determined that they would not be viable, since they would increase the fiscal deficit and public debt to unsustainable levels.

The two have also indicated that they would deport 11 million undocumented immigrants, and Trump has insisted he will build a "wall" on the border between the US and Mexico, and that somehow he will force the Mexican government to pay for it (the Mexican government has already indicated it will do no such thing).

The two conservative candidates have proposed repealing "Obamacare", without going into details on what they would replace it with (Trump insists he will replace it with a "fantastic" plan that would cost less, and "not let people die in the street") . In practice, the Republicans would probably allow 20 million people who have achieved health insurance through "Obamacare" to lose it again.

Both candidates have said they would abrogate existing free trade agreements; and Trump has said he would recruit private entrepreneurs to negotiate new "fantastic deals" with China, Mexico, etc.; or, if that is not possible, impose tariffs of 35-45% on their imports (this, of course, would have a severe inflationary impact in the US, and would most likely lead to a trade war).

Republican debates, which began with 17 pre-candidates and ended up with three, never focused on the substantive programmatic issues, and always led to mutual insults, degrading to levels of questioning the size of the genitals of the other candidates, as well as how attractive their wives were.

More than an election campaign, this has been likened to a "reality show", such as "The Apprentice", a program in which Trump was the presenter. The multi-millionaire candidate (who claims to possess a fortune of about 9 billion dollars, but independent estimates put it at less than 2 billion) has violated virtually all the rules of electoral campaigns: insulting Mexicans, Muslims, Republican Senator John McCain (who was a prisoner of war in Vietnam, and was the Republican presidential candidate in 2008), all of his opponents, and even having the bad taste of derisively imitating a journalist with a disability. He has proposed banning the entry of all Muslim people to the United States, except, he said, some of his millionaire friends. He recently indicated that he might allow South Korea and Japan to develop nuclear weapons, and that he might use nuclear weapons against ISIS.

Trump also has several potential problems in his business practices, including a lawsuit for fraud against "Trump University"; hiring undocumented Polish immigrants to build "Trump Tower" in NY; recently hiring short-term temporary foreigners for his resort "Mar-a-Lago" in Florida, rather than available US citizens; and there have even been articles that allege potential links with the mafia in his construction business.

Despite all these campaign errors, Trump is the favorite, with a lead of 410 delegates over Ted Cruz by May 1st, and a total of 956 delegates (77 % of the total needed for the nomination).

Virtually all the "establishment" powers of the Republican Party have tried to stop his candidacy, being convinced that it would lead to a catastrophic loss by the Republicans in the November general election; but he seems likely to reach most of the delegates before the Republican convention and be the nominee.

Assuming that the nominations of Hillary Clinton and Donald Trump take place, all the experts believe that Clinton will win with a large majority of the "electoral college", which could even surpass the broad victory of Barack Obama in 2008. The Democrats even have the expectation that they could regain the majority in the Senate, as there are 24 Republican seats in play, and only 10 Democratic seats. Paul Ryan, the Speaker of the House, has indicated that he could not guarantee that the Republicans maintain a majority of the House of Representatives if Trump is the candidate.

The control of the Executive branch and the Senate would enable the Democrats to nominate one or more members of the Supreme Court, where there is currently a vacancy caused by the death of conservative Antonin Scalia. This could tilt the balance of the Court to progressive positions for the first time in decades.

More generally, the demographic changes in the United States, with the growth of the Latino and Asian-American populations, tends to favor the Democratic Party, which has received the majority of the popular vote in all of the elections of the 21st century except in 2004 (in 2000, Al Gore won the majority of popular vote, but - thanks to the intervention of the Supreme Court granting the State of Florida to George W. Bush - Bush was elected).

May 10 Update: Both Ted Cruz and John Kasich have suspended their campaigns, leaving Trump as the presumptive nominee.

(*) A Spanish version of this article will be published in the May 2016 edition of "Revista Gestión" of Ecuador. The views are personal and do not reflect those of any entity.

Wednesday, February 3, 2016

The Independent
Association of Latin America and the Caribbean (AILAC) achieved a complete
success in its negotiating strategy on climate finance for the Paris Agreement
on Climate Change.

All of the priorities, red
lines, and "bridging proposals" made by AILAC were considered in the
Agreement and the Decision that adopted it; and the concepts developed by AILAC were
the core aspects of the climate finance "package" in the Agreement.

Thus, AILAC achieved an
incidence well above its weight in the world economy (measured by GDP, population
or greenhouse gas emissions). This was achieved due to the positioning of AILAC
as a group of ambitious developing countries willing to make commitments on
mitigation and adaptation, and with a capacity for dialogue with developed
countries (promoting the notion that an ambitious agreement on reducing
emissions required adequate counterpart funding commitments by developed
countries). The role of Peru as the COP20 Presidency was vital, as well as the
leadership of Colombia (Colombian delegates were appointed as Co-Facilitator
for Adaptation and as a member of the Group of Legal and Linguistic Experts).

AILAC, initially formed
by Colombia, Costa Rica, Chile, Guatemala, Panama, and Peru, was consolidated
throughout 2015 with the entry of Paraguay in June and Honduras in December.
AILAC had a very active role within the Group of 77 and China (the group of 134
developing countries), and in the Cartagena Dialogue (a space for dialogue
between developed and developing countries which share a progressive and
ambitious position). Several of its member countries also joined the "High
Ambition Coalition " that emerged in the course of COP21, which grew to
more than a hundred countries, including the United States, Canada, the
European Union, and Brazil.

Priorities defined by AILAC

Since 2014, AILAC defined
the following priorities for the climate finance component of the Paris Agreement:

• A collective quantitative target for the
provision and mobilization of climate finance, to be defined periodically (AILAC
proposed every five years), and to take as a "floor" the existing
commitment to mobilize $ 100 billion per year from 2020.

• Developed countries
should periodically communicate "ex
- ante" the funding that they will provide developing countries (AILAC
proposed a biennial communication).

• A qualitative long-term goal that would
lead to all investments and financial flows being gradually directed towards
promoting a low-carbon and climate resilient development.

• Ratifying the
existing obligation of developed countries to provide climate finance; initially,
it was proposed to invite "other countries in position to do so" to
also provide funding. Eventually, AILAC introduced as "bridging proposal "
a sentence ratifying the obligation of developed countries, and another one
inviting other countries to contribute (in a voluntary manner).

• to maintain all
developing countries as recipients of climate finance; avoiding giving
preference to any specific geographical regions.

• Promoting a more balanced finance for adaptation.

• Increased transparency of information on the provision of financial
support.

• Strengthen the Operating Entities of the Financial Mechanism of the
Convention, which should serve the new agreement.

• Allowing the
development of new international markets
for the exchange of emission reduction certificates.

The concepts were
introduced by "Submissions" presented at COP20 and during 2015; and also
verbally during the ADP sessions in 2015.

It was decided that the
main strategy to promote these priorities would be through the G77 & China,
which was achieved by incorporating most of these positions in the
"Submissions" presented by the G77 & China as a whole. In some
cases, when there was no consensus within G77 & China (for example, with
respect to qualitative long-term goal, and the invitation to other potential
donors), dialogue continued with different groups of developing and developed
countries.

An ongoing dialogue was
maintained with the European Union, the Environmental Integrity Group (EIG) and
NOAK (Nordic countries, including Norway); and also with the Cartagena
Dialogue. In October a dinner was organized with various groups of developed
and developing countries (including the United States, European Union,
Switzerland, Mexico, AOSIS, LDCs) to promote the AILAC priorities in financing.

The concepts that faced
greater resistance on behalf of developed countries were the quantitative
collective goal to be reviewed periodically; as well as the ex - ante communication
of the financing to be provided. Gradually, throughout 2015, these countries
realized that these elements were essential to providing balance to the Paris
Agreement as a whole.

How were AILAC priorities reflected in
the Agreement and the Decision?

In the end, as was
already mentioned, all of the AILAC priorities were reflected:

1. Quantified Collective Goal: Para. 54 of the Decision: "Also decides that, in
accordance with Article 9, paragraph 3, of the Agreement, developed countries
intend to continue their existing collective mobilization goal through 2025 in
the context of meaningful mitigation actions and transparency on
implementation; prior to 2025 the Conference of the Parties serving as the
meeting of the Parties to the Paris Agreement shall set a new collective
quantified goal from a floor of USD 100 billion per year, taking into account
the needs and priorities of developingcountries".

2. Ex-ante communication of financing to be provided: Art.9.5. "Developed
country Parties shall biennially communicate indicative quantitative and
qualitative information related to paragraphs 1 and 3 of this Article, as
applicable, including, as available, projected levels of public financial
resources to be provided to developing country Parties. Other Parties providing
resources are encouraged to communicate biennially such information on a
voluntarybasis".

4. Ratification of obligation of developed countries to provide financing
/ invitation to others to do so: Art 9.1 and 9.2 "9.1. Developed
country Parties shall provide financial resources to assist developing country
Parties with respect to both mitigation and adaptation in continuation of their
existing obligations under the Convention. 9.2. Other Parties are encouraged to
provide or continue to provide such support voluntarily."

5. Keep reception of
resources open to all developing countries: Article 9.1. already mentioned, as
well as 9.3 and 9.4. There is no reference to specific geographic regions.

6. Greater balance in financing for adaptation:
Art. 9.4. "The provision of scaled-up financial resources
should aim to achieve a balance between adaptation and mitigation, taking into
account country-driven strategies, and the priorities and needs of developing
country Parties, especially those that are particularly vulnerable to the
adverse effects of climate change … considering the need for public and
grant-based resources foradaptation."

7. Greater transparency in financial support: Art.
9.7: "Developed country Parties shall provide transparent and
consistent information on support for developing country Parties provided and
mobilized through public interventions biennially in accordance with the modalities,
procedures and guidelines to be adopted by the Conference of the Parties
serving as the meeting of the Parties to the Paris Agreement, at its first
session, as stipulated in Article 13, paragraph 13. Other Parties are
encouraged to doso."

8. Strengthen the Operating Entities of the Financial Mechanism: Art
9.8 and 9.9. "9.8.The Financial Mechanism of the Convention, including its
operating entities, shall serve as the financial mechanism of this Agreement. 9.9.
The institutions serving this Agreement, including the operating entities of
the Financial Mechanism of the Convention, shall aim to ensure efficient access
to financial resources through simplified approval procedures and enhanced
readiness support for developing country Parties, in particular for the least
developed countries and small island developing States, in the context of their
national climate strategies and plans."

9. Allow a market mechanism: this is reflected in
Art. 6.4 and Paras. 38 and 39 of the Decision.

The Green Climate Fund
(GCF) will become the main operating entity of the financial mechanism of the
new agreement. During COP21, additional contributions to the GCF were announced
by Norway, Canada, Vietnam, Estonia, City of Paris, and regions of Belgium;
bringing the total committed to more than USD 10 billion. Similarly, additional
donations were received for a total of USD 75 million for the Adaptation Fund
from Germany, Sweden, Italy and the Belgian region of Wallonia (https://goo.gl/CKYgkz); 11 countries announced
grants totaling USD 248 million to the Least Developed Countries Fund (LCDF);
and several countries announced substantial increases in their climate
financing in general (a summary of these announcements is available at: http://goo.gl/TZI01f).

AILAC Finance Team

One reason for the
success of AILAC in the climate finance field was the strength of the team of
delegates from AILAC that followed this issue. During COP21, the AILAC Finance Coordinators
were Isabel Cavelier Adarve of Colombia and Jorge Gastelumendi of Peru. Other delegates
that have played leading roles over the past two years include Maria Laura
Rojas and Santiago Briceño of Colombia; Giovanna Valverde of Costa Rica; and
Mirko Serkovic and Natalia Rojas-Jordan of Peru.

For me, it was a
privilege to have supported the AILAC climate finance team, and to have
contributed to the conceptual and strategic development that enabled these
important achievements, which ultimately will make it easier for developing
countries to pursue their mitigation and adaptation actions in the context of
the Paris Agreement.

(*) Climate Finance
Advisor for AILAC. The views expressed are personal and do not reflect the
positions of AILAC or its member countries.

About Me

Twitter: @Luis_Fierro_Eco
Economist specialized in Economics, Finance, Climate Change, Climate Finance and Development. 28 years of experience as economics and business analyst, researcher and practitioner.
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